It’s wonderful to be here in Davos sharing our commitment to improving the state of the world. And the recipe is really I think quite simple. All you’ve got to do is grow the economy, increase participation in that economy, within a rapidly-changing world, with increasing automation and technology, on a planet that’s straining to meet our resource needs. Piece of cake, right?
We know very little about complex financial systems and how systemic risk, as it’s called, is computed and how you would manage policies. And if you look back at the financial crisis, you can either say, as many economists do, “It all had to do with badly-designed rules,” which may be part of the story; it’s certainly part of the story. Or it may have to do with the interaction of those rules and human nature, like mortgage broker greed, optimism… And you see it not just in individuals who now have houses and foreclosure, but at the highest levels.